Aug 26, 2013 4:01:30 PM

Bloomberg BusinessWeekBy Patricia Clark2013 August 26

Since January, the Affordable Care Act has required insurers to cover breast pumps at no cost to new moms. That makes sense, given the law’s focus on preventive medicine. A 2010 article in the journal Pediatrics estimated that if 90 percent of U.S. moms were to breast-feed their infants exclusively for the first six months, it would save $13 billion a year in health-care costs.

The new law might seem like a bonanza for the breast pump trade, pumping millions to manufacturers and retailers. But it requires insurers only to cover pumps—high-end models cost $400 or more—purchased through durable medical equipment suppliers (DMEs). Those are companies eligible to be reimbursed by government and private insurance for certain kinds of medical equipment, usually for long-term use at home. The accreditation process is complex; the market is big: Retail spending for durable medical equipment was $38.9 billion (PDF) in 2011, according to the Centers for Medicare and Medicaid Services.

Before the law took effect, most DMEs didn’t offer breast pumps, and most stores that sold pumps weren’t accredited as DMEs, says Amanda Cole, who launched the Yummy Mummy on Manhattan’s Upper East Side in 2009 to cater to nursing moms. After she learned about the provision, Cole applied for accreditation as a DME and started courting insurers. “I thought my business was in jeopardy,” she says. “Who’s going to buy a pump when they can get it for free?”

Since the beginning of this year, when the breast pump benefit kicked in, Cole has increased her head count to 17 workers and rented space for a call center, so she could sell nationwide. The strategy is working: Cole, whose company became a DME last year, says she’s selling hundreds of breast pumps a week. “A lot of the DMEs are focused on the elderly and the sick,” she says. “They sell things like oxygen tanks and hospital beds. All we do is breast pumps, and that’s been a great proposition.”

The implementation of the benefit hasn’t been without hitches. Joy Kosak already had a breastfeeding business—she’s the cofounder of a Sacramento (Calif.)-based company called Simple Wishes, which sells hands-free pumping bras—when the new benefit took effect. She launched a new business called Pumping Essentials in November with two employees, waded through the red tape required to open a DME, and teamed up with her first insurer in April. She now has seven workers and says she’s selling about 300 breast pumps a month.

“The language is so vague that it’s being interpreted many different ways by providers,” Kosak says. That means some insurers will only pay for rental or manual pumps. Others have said that it takes weeks to fill out required paperwork, and some insurers have told women that pumps are not covered at all, according to a policy paper published last month by the U.S. Breastfeeding Committee.

Supply has also been a problem. Medela, a major supplier of breast pumps to U.S. hospitals, has increased production of its consumer models by 50 percent to meet demand. That isn’t enough to stop Kosak from worrying about future shortages. Currently, she says, she pre-orders five months worth of inventory to reduce the risk of running out of stock.

Part of the problem is that many DMEs didn’t offer breast pumps until this year, which means they lack historical data to forecast demand, says Rachel Mennell, a spokeswoman for Medela: “After the first year, I think everyone will be able to do a better job forecasting.”

Originally published at http://www.businessweek.com/articles/2013-08-26/obamacare-encourages-baby-boutiques-to-bet-on-breast-pumps

Aug 6, 2013 12:36:39 PM

When Yummy Mummy founder Amanda Cole first started breastfeeding her now 5-year-old daughter, she ran into a few roadblocks. The products and supplies that she needed were scattered from store to store and across various websites, and she felt she didn’t have the support she needed. Getting acclimated with the complex choreography of baby feeding was a stressful experience for the first-time mom; so stressful, in fact, that she broke down in tears one day after realizing she purchased the wrong type of breast pump.

“My whole experience with getting breastfeeding products was so difficult. I thought, ‘Breastfeeding is hard enough. There has to be an easier way,’” remembers Cole, who also nursed her second child.

Cole made it her mission to help other breastfeeding mothers like herself and opened Yummy Mummy on the Upper East Side in May of 2009. With clear, user-friendly displays, knowledgeable staff members, and a welcoming environment, the boutique is dedicated to making breastfeeding a positive experience for women.

“There are oftentimes unexpected hurdles along the way,” Cole says. “And we’re just there to help and not judge—and to be support for you.”

Cole likes to refer to the store as a “one-stop shop” that has everything new or expectant moms need for breastfeeding, all conveniently located in one place. While about 80% of the products are geared toward breastfeeding moms—including breast pumps, nursing pillows, and nursing bras—Yummy Mummy offers items to suit just about any new mom’s needs, such as bottles, postpartum care products, and maternity clothing.

But you won’t find rattles or playmats on the shelves.

“A lot of the time I’ll get manufacturers who come and pitch different baby products,” Cole says. “[But] we try to stay true to it being all about mom.”

A great breastfeeding experience is about more than just the right supplies, of course. Having support and encouragement is just as important. In addition to providing all of the gear and equipment that moms need for breastfeeding, Yummy Mummy also offers various types of classes. Some of the more popular ones are Childbirth Preparation, Baby Safety & CPR, and Doula Speed Dating, in which expectant women meet five to ten doulas in one session, making the search for a labor coach relatively quick and easy.

The store’s most well-attended class, however, is the obvious choice: “A lot of moms have met their closest friends at our Breastfeeding Support Group,” Cole says. “They come here; their babies are the exact [same] age. They bond, they see each other weekly, and then they leave and go for lunch. I think some really nice friendships have formed.”

Although the store opened during the recession, the business has been steadily growing over the past four years. One recent boon for business has been the Affordable Care Act, which was signed into law last summer. The ACA requires that health insurance plans cover women’s preventative services, which includes breast pumps, breast pump supplies, counseling, and support. In fact, Yummy Mummy recently opened a call center—also on the Upper East Side—where they receive orders and ship breast pumps across the country every day.

“We’ve been working closely with different insurance plans to provide breast pumps to moms all over the country,” Cole says. By partnering with various companies, Yummy Mummy has made pumps more easily accessible through Aetna Health Insurance, Blue Shield – CA, Cigna, EmblemHealth (GHI and HIP), Empire Blue Cross Blue Shield, Humana, Lifewise, POMCO Group, and Premera Blue Cross—with plans to further expand in the near future.

While she spends a lot of time finding new and helpful products for moms, Cole says her favorite part of her job is still working with her clientele. “We have the best customers,” she says. “They’re so appreciative of all the services and products that we offer, and that makes us feel really good.”

Having eventually achieved breastfeeding bliss with both of her own children, Cole knows how important it is for a new mother to be supported through such a delicate choice. To that end, Cole says that Yummy Mummy’s focus always remains on the individual: the mom who needs some advice on what kind of breast pump to buy or how she can get her newborn to feed more efficiently.

“My biggest priority is just maintaining the same level of customer service that we’ve always had,” she adds. “I think that’s really what defines us.”

Feb 7, 2013 10:04:16 AM

Yummy Mummy was featured recently on NPR.

Health insurance plans now have to cover the full cost of breast pumps for nursing mothers. This is the result of a provision in the Affordable Care Act (aka Obamacare), and the new rule took effect for many people at the start of this year.

It's led to a boom in the sale of the pumps, which can cost hundreds of dollars.

Yummy Mummy, a little boutique on New York's Upper East Side, has suddenly become a health care provider/online superstore. The company has been hiring like crazy, and just opened an online call center and a warehouse in Illinois. Yummy Mummy even hired somebody to talk to customers' health insurance companies.

And new moms now seem more likely to splurge on fancy new breast pumps. Caroline Shany, a Yummy Mummy customer, spent her own money to buy a breast pump for her first baby. She may buy another one now because insurance will pick up the tab.

"Why not?" she says.

Weird things happen when you take price out of the equation for consumers. For one thing, they stop looking for the best price. But even though breast pumps are free for new moms, somebody has to pay for them.

"Health insurance premiums are driven by how much we spend on health care," says Harvard health economist Katherine Baicker. "The more things that are covered by health insurance policies, the more premiums have to rise to cover that spending."

Advocates of requiring insurance companies to pay for breast pumps say that the measure will pay for itself in the long run. Babies that are breast fed tend to have fewer health problems, and paying for breast pumps should mean more babies are breast fed.

Whether that happens may depend partly on how the new rules are implemented. Insurers are still trying to figure out whether to pay for extra-fancy breast pumps, or just basic models.